Stanford Lured Clients With ‘No Worry’ Promise, Rates http://www.bloomberg.com/apps/news?pid=20601087&sid=a0XVjooQdppA&refer=home
Mind where your savings are, friends. Peace and best wishes. Xi On Feb 17, 6:35 pm, "[email protected]" <[email protected]> wrote: > My comment: and more to come. > > http://www.bloomberg.com/apps/news?pid=20601087&sid=aK6tg..PNMos&refe... > > Feb. 17 (Bloomberg) -- U.S. regulators accused R. Allen Stanford of > running a “massive, ongoing fraud” while selling about $8 billion in > certificates of deposit through Antigua- based Stanford International > Bank Ltd. > > The bank made “improbable and unsubstantiated” claims about its > ability to generate “safe” returns of more than 10 percent, and it > misled investors about exposure to Bernard Madoff’s alleged Ponzi > scheme, the Securities and Exchange Commission said today in a > complaint against Stanford, firms he controls and two colleagues. The > agency asked the Dallas federal court to freeze assets and appoint a > receiver to return money to investors. > > The SEC has been investigating Stanford’s Houston-based investment > firm, Stanford Group, since at least last summer over sales of > certificates by the Antigua-based affiliate. The inquiry intensified > after the December arrest of New York money manager Madoff, who > allegedly confessed to masterminding a $50 billion fraud in which > early investors were promised steady returns and paid with money from > later participants. > > “We are alleging a fraud of shocking magnitude that has spread its > tentacles throughout the world,” Rose Romero, director of the SEC’s > Fort Worth office, said today in a statement. Stanford spokesman Brian > Bertsch did not immediately return a call seeking comment. > > The SEC has asked former employees about the bank’s stated returns on > investment, between 10.3 and 15.1 percent every year from 1995 until > last year, according to documents and annual reports on the bank’s Web > site. SIB says it has $7.2 billion in assets and 30,000 clients, > according to the SEC. > > ‘Routine Examinations’ > > Investigators from the Financial Industry Regulatory Authority visited > six Stanford Group offices in January, downloaded information from > computer hard drives and looked through files, people familiar with > the events said. The people declined to be identified because they > didn’t want to put their current jobs at risk. > > “Regulatory officers have conveyed to us these visits are part of > their routine examinations,” Allen Stanford said in a Feb. 11 letter > to clients and an e-mail message to the company’s employees obtained > by Bloomberg. > > Stanford said in a Feb. 12 e-mail to his employees that he’d “fight > with every breath to continue to uphold our good name” in the face of > the investigations. > > On Feb 14, 9:31 pm, "Sumerian.." <[email protected]> wrote: > > > > > I am not so knowledgeable about sayings.. I will try to recall.. > > > Hungry wolves.. interesting.. Lets see.. > > > Regards > > > ======= > > S1000+ > > ======= > > > --- On Sat, 2/14/09, [email protected] <[email protected]> wrote: > > From: [email protected] <[email protected]> > > Subject: Re: For American friends > > To: "World-thread" <[email protected]> > > Date: Saturday, February 14, 2009, 11:24 AM > > > Exavtly. I bet that you have a saying in your country that sounds more > > or less like "after shepherds dispute each to other, sheep dies". > > > Yes, wolves are in dispute, people must be careful. > > > Peace and best wishes. > > > Xi > > > On Feb 14, 7:29 pm, "Sumerian.." <[email protected]> > > wrote: > > > > You mean the wolves will eat each other once hungry > > > > ======= > > > S1000+ > > > ======= > > > > --- On Sat, 2/14/09, [email protected] <[email protected]> > > wrote: > > > From: [email protected] <[email protected]> > > > Subject: For American friends > > > To: "World-thread" <[email protected]> > > > Date: Saturday, February 14, 2009, 4:42 AM > > > > My comment: Just to be aware of what might begin in some financial > > > institutions. > > > > Peace and best wishes. > > > > Xi > > > > Stanford Pledges `Necessary Actions' to Protect Depositors as U.S. > > > Probes > > > Stanford Blames ‘Former Disgruntled’ Workers in > > > Probehttp://www.bloomberg.com/apps/news?pid=20601109&sid=ajyP6jGBwJlA&refe... > > > > Feb. 13 (Bloomberg) -- R. Allen Stanford, the billionaire chairman of > > > Houston-based investment firm Stanford Group Co., blamed “former > > > disgruntled employees” for stoking regulatory probes into his firm. > > > > Stanford Group is under investigation by the U.S. Securities and > > > Exchange Commission and the Financial Industry Regulatory Authority, > > > according to people familiar with the matter who declined to be > > > identified because they didn’t want to put their jobs at risk. The > > > agencies are examining the company’s sales of certificates of deposit > > > issued by its Antigua-based affiliate, Stanford International Bank > > > Ltd., and the consistent, above- average returns those investments > > > paid, the people said. > > > > “We are all aware that former disgruntled employees have gone to the > > > regulators questioning our work and our processes,” Stanford said > > > yesterday in an e-mail to staff members that was obtained by Bloomberg > > > News. “This could have compounded an otherwise routine examination.” > > > > Investigators from Finra visited six Stanford Group offices last > > > month, downloaded information from computer hard drives and looked > > > through files, the people said. > > > > “Regulatory officers have conveyed to us these visits are part of > > > their routine examinations,” Stanford said in his e-mail message. He > > > repeated that assertion in a letter to clients dated Feb. 11 and > > > obtained by Bloomberg. > > > > “Please do not get discouraged by what you read in the press,” Allen > > > Stanford wrote in the letter. “We are hard at work delivering on our > > > commitment to you.” > > > > Finra has asked former employees about the bank’s stated returns on > > > investment, the people said. > > > > ‘Decisive Steps’ > > > > The returns were between 10.3 percent and 15.1 percent every year from > > > 1995 until last year, according to documents and annual reports on the > > > bank’s Web site. > > > > SIB has $8.5 billion in assets and 30,000 clients, according to the > > > site. > > > > Deposits climbed to $7.7 billion in July, from $3 billion at the end > > > of 2004, according to press releases and the mid-year report posted on > > > the site. > > > > “On the issue of Stanford International Bank, I want to be very > > > clear,” Stanford said in the e-mail. “SIB remains a strong > > > institution, and even without the benefit of billions in U.S. > > > taxpayers’ dollars we are taking a number of decisive steps to > > > reinforce our financial strength. We will take the necessary actions > > > to protect our depositors.” > > > > ‘Whatever Steps Necessary’ > > > > Stanford in his letter assured clients he will take “whatever steps > > > necessary” to protect their deposits. > > > > “We have already added two capital infusions into the bank and are > > > considering additional actions,” he wrote. > > > > Stanford, 58, vowed to “fight with every breath to continue to uphold > > > our good name.” > > > > Finra spokesman Herb Perone said the agency doesn’t confirm or deny > > > investigations. Kevin Edmundson, an SEC investigator in Ft. Worth, > > > Texas, said, “I can’t even confirm the existence of the > > > investigation.” > > > > The SEC issued subpoenas last July to at least two former Stanford > > > employees. Last month, the agency questioned two former Stanford > > > financial advisers, according to the people familiar with the > > > situation. > > > > The SEC has stepped up probes after being accused of failing to heed > > > warnings that Bernard Madoff’s investment returns were too good to be > > > true. Madoff was arrested Dec. 11 after allegedly telling his sons > > > that his business was a $50 billion Ponzi scheme. The SEC has since > > > announced unrelated lawsuits against at least seven money managers for > > > allegedly inflating profits or siphoning off client money. > > > > Marketing CDs > > > > Stanford Group pushed its financial advisers to steer clients’ money > > > into the offshore CDs, paying a 1 percent bonus commission and > > > offering prizes including trips and cash for the best producers, > > > according to four former advisers who asked not to be identified. > > > > Marketing material for Stanford Group CDs raised red flags, said Bob > > > Parrish, a financial planner and accountant in Longboat Key, Florida. > > > > The use of the term “CD” to describe the investment was misleading > > > because most investors associate it with a safe, FDIC- insured > > > instrument, Parrish said. > > > > ‘Enjoying Those Checks’ > > > > “It was a familiar term being used to describe an instrument that > > > really would not fall within the meaning of a CD,” Parrish said in a > > > telephone interview. He advised six clients to take their money out of > > > the CDs, he said. > > > > An internal e-mail from 2005 obtained by Bloomberg showed Stanford > > > urging a team of 61 Stanford Group financial advisers to bring $62.5 > > > million in new money to the bank in one quarter. > > > > “Many of you are just now enjoying those checks from our 2nd quarter > > > team performance of $44 MM,” the e-mail said. “I’m sure you look > > > forward to getting another one after this quarter.” > > > > Stanford Group’s one-year, $100,000 CD paid 4.5 percent annual yield > > > as of Nov. 28, according a posting on the Web site yesterday. A one- > > > year, $10,000 CD purchased at JPMorgan Chase & Co. would earn 1.5 > > > percent, according to its consumer banking Web site. > > > > SIB describes the CDs in its disclosure statement as traditional bank > > > deposits. The bank doesn’t lend proceeds and instead invests in a mix > > > of equities, metals, currencies and derivatives, according to its Web > > > site and CD disclosures.- Hide quoted text > > ... > > read more »- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
